EX-10.1 4 v053224_ex10-1.htm
                           ADVISORY SERVICE AGREEMENT

      THIS ADVISORY SERVICE AGREEMENT (the "Agreement") is entered into as of
this 23 day of June, 2006 (the "Effective Date") by and between INDIGO-ENERGY,
INC., a Nevada corporation (the "Company"), and HUB ENERGY, LLC, a Pennsylvania
limited liability company (the "Advisor" and together with the Company, the
"Parties" each a "Party").

                                   WITNESSETH:

      WHEREAS, the Company has requested and the Advisor has agreed to provide
exclusive advisory services in connection with the Company's contemplated
exploration and development of certain oil and gas prospects located in
Pennsylvania, West Virginia, Kentucky, and Illinois (collectively, the
"Premises");

      NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties and covenants contained herein, and other good and
valuable consideration, the adequacy and receipt thereof which is hereby
acknowledged, and intending to be legally bound hereby, the Parties to this
Agreement agree as follows:

      Section 1. Definitions; Construction. For purposes of this Agreement,
unless the context otherwise requires, the following defined terms shall have
this meanings set out below:

            (a) "Common Stock" has the meaning set forth in Section 4(a)(1)
herein;

            (b) "Deep Well" means any well drilled to a total depth of 6,000
feet or greater;

            (c) "Deposit" has the meaning set forth in Section 4(c) herein;

            (d) "Drilling and Operating Agreement" means the Drilling and
Operating Agreement by and between the Advisor and the Company or its assignees,
substantially in the form attached as Exhibit C hereto; ---------

            (e) "Drilling Services Fee" has the meaning set forth in Section
4(b) herein;

            (f) "Effective Date" has the meaning set forth in the preamble;

            (g) "Gathering Lines" has the meaning set forth in Section 9(a)
herein;

            (h) "Gross Well(s)" means the wells in which a Party or entity holds
a Working Interest (as that term is defined herein);

            (i) "Horizontal Well" means any well that is not vertically drilled;




            (j) "Landowner's Royalty Interest" means an ownership interest in
oil and gas production, or the proceeds from the sale thereof, to be received
free and clear of all costs of development, operation or maintenance, reserved
by the owner of the property where producing wells are located upon creation of
an oil and gas lease.

            (k) "Lease Acquisition(s)" has the meaning set forth in Section 6
herein;

            (l) "Losses" has the meaning set forth in Section 17 herein;

            (m) "Net Revenue Interest" means the net interest in production from
a well, or the proceeds therefrom, after payments to those holding Landowner's
Royalty Interests and Overriding Royalty Interests (as those terms are defined
herein) and subject to the proportionate participation rights of parties to any
agreements of mutual interest;

            (n) "Net Well" means the equivalent of a full Working Interest in
one well obtained by the aggregation of partial Working Interests in two (2) or
more wells;

            (o) "New Pipeline(s)" has the meaning set forth in Section 9(b)
herein;

            (p) "Operator(s)" means the party or parties responsible for the
operations of wells once they have been drilled and completed;

            (q) "Option Agreement" means the Option Agreement substantially in
the form attached as Exhibit A hereto;

            (r) "Overriding Royalty Interest" means an ownership interest in oil
and gas production, or the proceeds from the sale thereof, to be received free
and clear of all costs of development, operation or maintenance;

            (s) "Shallow Well" means any well drilled to a total depth of less
than 6,000 feet;

            (t) "Term" has the meaning set forth in Section 3 herein;

            (u) "Turnkey Drilling Price" means the amount paid to the Operator
under each Drilling and Operating Agreement, subject to the modifications set
forth in Sections 4(e) and 7(a) herein; and

            (v) "Working Interest" means an ownership interest in a lease giving
the interest owner certain rights which may include the right to develop and
receive oil and/or gas produced from a well or the revenues from the sales
thereof subject to the costs of development, production, operation and marketing
and subject to the rights and interests of the holders of the Landowner's
Royalty Interest (who do not contribute toward the cost of development).


                                       -2-


      Section 2. Engagement.

            (a) Subject to the terms and conditions of this Agreement, the
Company hereby engages the Advisor, and the Advisor hereby accepts such
engagement to be the exclusive provider to the Company of oil and gas
exploration and production operation services, and such other related services
to the Company (all of the foregoing, the "Services") as may be mutually agreed
upon between the Company and the Advisor, and as more fully set forth herein.

            (b) To the extent necessary or appropriate to perform any of the
Services contemplated under this Agreement, the Company grants to the Advisor
any and all power and authority required to execute and deliver any necessary
and/or appropriate documents and instruments on behalf of the Company with
respect to either the Services or the Premises or both.

      Section 3. Term. This Agreement shall be effective for a period of three
(3) years commencing on the Effective Date (the "Term").

      Section 4. Compensation; Advance Fee; Reimbursement; Drilling Services
Fees; and Activities.

            (a) Compensation. In consideration of the Advisor's agreement to
provide the Services, the Company shall issue to the Advisor, pursuant to the
terms and conditions set forth in the Option Agreement, options to acquire the
following securities:

                              4.a.1 9.0 million shares of common stock, par
                        value $.001 per share of the Company (the "Common
                        Stock"), at an exercise price of $2.00 per share
                        exercisable upon completion and delivery, as described
                        herein, of one hundred and fifty (150) wells capable of
                        producing oil and/or gas on the Premises, as set forth
                        in Schedule A attached hereto. The right to exercise
                        such options shall be reduced on a pro rata basis in the
                        event that Advisor delivers fewer than one hundred fifty
                        (150) wells capable of producing oil and/or gas on the
                        Premises;

                              4.a.2 3.0 million shares of Common Stock at an
                        exercise price of Two Dollar ($2.00) per share
                        exercisable upon completion and delivery, as described
                        herein, of an additional fifty (50) wells capable of
                        producing oil and/or gas on the Premises, as set forth
                        in Schedule A attached hereto. The right to exercise the
                        options shall be reduced on a pro rata basis in the
                        event that Advisor delivers fewer than fifty (50) wells
                        capable of producing oil and/or gas on the Premises; and

                              4.a.3 3.0 million shares of Common Stock at an
                        exercise price of Two Dollars ($2.00) per share
                        exerciable upon completion and delivery, as described
                        herein, of an additional fifty (50) wells capable of
                        producing oil and/or gas on the Premises, as set forth
                        in Schedule A attached hereto. The right to exercise
                        such options shall be reduced on a pro rata basis in the
                        event that Advisor delivers fewer than fifty (50) wells
                        capable of producing oil and/or gas on the Premises.


                                       -3-


The Common Stock to be issued upon exercise of the options granted pursuant to
this Section 4(a) shall be subject to certain registration rights as more fully
described in Section 13 herein and granted pursuant to a Registration Rights
Agreement between the Advisor and the Company substantially in the form attached
as Exhibit B hereto (the "Registration Rights Agreement").

            (b) Drilling Services Fee. The Advisor shall be entitled to a
nonrefundable drilling services fee in the amount of Seven Thousand Five Hundred
Dollars ($7,500) per Gross Well ("Drilling Services Fee"), payable upon the
completion of each well. The Drilling Services Fee will be reduced pro rata in
the event that the [leaseholder/owner] of the Gross Well holds less than a
sixty-two and one half percent (62.5%) Working Interest in such Gross Well.

            (c) Advance Fee. Prior to the execution of this Agreement, the
Company will have paid to the Advisor a good faith deposit in the amount of
Seventy-Five Thousand Dollars ($75,000) (the "Deposit") to pay for such services
as the Advisor deemed necessary in order to commence its obligations in
connection with this Agreement including but not limited to: hiring employees,
making payments to outside consultants including legal advisors, and
establishing an office in Indiana, PA to be used jointly by the Advisor and the
Company. The Advisor and the Company agree that the Deposit shall be amortized
over the course of the first ten (10) Net Wells drilled and applied against the
Drilling Services Fee payable hereunder for such Net Wells.

            (d) Reimbursement of Expenses. The Company shall reimburse the
Advisor for the reasonable out-of-pocket expenses incurred by the Advisor in
performing the Services hereunder, including, without limitation, drilling and
excavation activities relating to the wells.

            (e) Additional Drilling Services Fee for Shallow Wells. The Advisor
shall be entitled to increase the Drilling Services Fee per well of each oil and
gas well contracted for under this Agreement (each Operator will provide a
separate Turnkey Drilling Price under a Drilling and Operating Agreement) for
conventional Shallow Wells in Pennsylvania, West Virginia and Kentucky by an
amount of Twelve Thousand Five Hundred Dollars ($12,500) per Gross Well to cover
all general and administrative expenses that will be incurred by the Advisor.

            (f) Overriding Royalties. The Advisor shall deliver to the Company
Working Interests under leases that, in almost all cases, will result in a Net
Revenue Interest of 81.25% for a one hundred percent (100%) Working Interest. If
the Net Revenue Interest to the Company under a lease is less than 81.25%, the
Company must approve, in writing, its participation prior to the commencement of
drilling operations under that particular lease.

      Section 5. Oil and Gas Operating Company Acquisitions; Right of First
Refusal. During the Term of this Agreement, the Company shall use the Advisor on
a non-exclusive basis and the Advisor shall have a right of first refusal in
order to initiate and/or to investigate any and all potential oil and gas
acquisition opportunities then contemplated by the Company. The Company further
agrees to reimburse the Advisor for any and all reasonable out-of-pocket
expenses incurred in connection with its work regarding any such potential
acquisition of an oil and gas company or property (an "Acquisition").


                                       -4-


            In addition, the Company agrees that any such Acquisition
consummated by the Company or its proxies during the Term of this Agreement
shall be accomplished solely through the formation of a new general partnership
acting as the acquiror, and in which the Advisor and the Company shall hold
partnership interests. Moreover, the Advisor shall also be entitled to an
undivided one-sixteenth (6.25%) interest in the oil and gas interests acquired
pursuant to any Acquisition for its expertise and guidance.

      Section 6. Oil and Gas Lease Acquisitions. During the term of this
Agreement, the Company will have a right of first refusal to match the price of
any offer on any lease acquisition opportunities brought to its attention by any
individual Operator or by the Advisor. Should the Company, in its sole
discretion, choose to avail itself of any such lease acquisition opportunity,
the Company agrees to fund such lease acquisition (each a "Lease Acquisition",
and collectively, the "Lease Acquisitions") under terms to be negotiated with
the seller on a deal-by-deal basis. The Parties hereby acknowledge and agree
that any such Lease Acquisition consummated under this Section 6 shall be
governed by the terms and conditions of a lease acquisition agreement, which
shall include, among other things, a provision substantially similar to the
following:

            "The party who wishes to begin oil and gas operations on such
            leasehold (the "Offeror") shall be obliged to offer the other party
            (the "Offeree") an opportunity to invest in up to fifty percent
            (50%) of any well on such leasehold. The Offeree shall have thirty
            (30) days from the time of notice of such opportunity to indicate
            his intentions. If he responds negatively or fails to respond within
            the thirty (30) day period, the Offeror shall have the right to
            proceed with the drilling of the well on his own or with any other
            co-venturers that the Offeror might select."

      Section 7. Drilling Activities.

            (a) All oil and gas drilling activities contemplated hereunder shall
be completed using a Drilling and Operating Agreement. The Company acknowledges
and agrees that each Operator will charge a different Turnkey Drilling Price for
wells drilled under this Agreement due to differences in depth, number of zones
framed, their internal cost structures, etc.

            (b) The Company shall provide all Operators as well as the Advisor
with the right, but not the obligation, to participate in any wells drilled
under this Agreement; provided, however, that in no case shall the Company have
less than fifty percent (50%) of the Working Interest in each well. All
participants in the well(s) must declare their participation percentages in each
well package prior to the commencement of drilling operations.


                                       -5-


      Section 8. Operating Activities

            (a) Typical Wells. The Parties agree that, with the possible
exception of Deep Wells or Horizontal Wells, all wells drilled according to this
Agreement shall be governed by a Drilling and Operating Agreement. In any such
case as may require a substantial deviation from the terms of the form Drilling
and Operating Agreement attached hereto, the Advisor agrees to consult with
Company regarding the changes that need to be made in order to execute a revised
Drilling and Operating Agreement.

            (b) Deep or Horizontal Wells.

                              8.b.1 Given the nature of the oil and gas
                        industry, the Parties recognize that any number of
                        potential oil and gas opportunities contemplated by this
                        Agreement may involve either Deep Well or Horizontal
                        Well drilling. The Parties agree that in the case of
                        either Deep Well drilling or Horizontal Well drilling,
                        the relationship between the Parties and the work
                        required to be done shall be governed by the terms and
                        conditions contained in Section 8(b)(i) of the American
                        Association of Petroleum Landmen Form 610, substantially
                        in the form attached as Exhibit D hereto.

                              8.b.2 In the case of either a Deep Well or
                        Horizontal Well, the Parties agree that all such Deep
                        Wells or Horizontal Wells drilled according to this
                        Agreement shall be governed by a deep drilling and
                        operating agreement substantially in the form attached
                        as Exhibit E hereto (the "Deep Drilling Operating
                        Agreement") In any such case as may require a
                        substantial deviation from the form Deep Drilling
                        Operating Agreement attached hereto, the Advisor agrees
                        to consult with Company regarding the changes that need
                        to be made in order to execute a revised Deep Drilling
                        Operating Agreement.

      Section 9. Pipelines. Given the nature of the oil and gas industry and the
activities contemplated by this Agreement, the Parties recognize and acknowledge
that any number of pipelines may need to be constructed for any or all wells
that are drilled under this Agreement. The terms and conditions governing the
creation of such pipelines shall be as follows:

            (a) Gathering Lines. To the extent that any oil and gas operation
under this Agreement requires the laying of new pipelines that are two inches
(2?) or less in diameter (the "Gathering Lines"), the costs of laying the
Gathering Lines shall be paid as provided in the Drilling and Operating
Agreement governing that particular well and well Operator or, in the
alternative, as provided for under any existing gas sales and marketing contract
of that Operator in that field.

            (b) New Pipelines. To the extent that any oil and gas operation
under this Agreement requires the laying of new pipelines that are greater than
2 inches (2") in diameter (the "New Pipeline"), the Parties agree in advance to
form a new partnership to be jointly owned by the Company, the Advisor, and any
combination of investors mutually agreed on by the Company and the Advisor to
acquire such things as rights of way, main line taps, compressors, separators,
pipeline, etc. in order to lay the New Pipeline, with the partners owning their
proportionate share of revenues from oil and/or gas using the New Pipeline.
Should the Company choose not to participate in such newly formed partnership,
the Advisor shall have the right, but not the obligation, to undertake the
construction of such New Pipeline, with the costs of such construction to be
borne by the Company. In any such case where the Advisor constructs New
Pipeline, it shall have the right to charge either ten percent (10%) of the
price being paid by the purchaser of the gas or $0.35/Mcf, whichever is greater,
for all gas that is transported through the New Pipeline to recover the costs of
the New Pipeline involved, gas transportation and compression charges,
desiccants and other charges that may be necessary and proper in order to
transport and market the oil and gas.


                                       -6-


      Section 10. Escrow Agreements. An escrow agreement shall be established to
administer payments to be made under this Agreement. All funds to be
administered in connection with this Agreement must be funded prior to the
commencement of operations under any Drilling and Operating Agreement or series
of agreements. The Advisor shall administer the funds in an escrow account and
shall make payments to the various persons or entities responsible for the
drilling and completion of the wells under a percentage of completion formula
based upon invoices presented to the Advisor.

      Section 11. Payment of Oil and Gas Revenues. The Advisor has no
responsibility for, and shall have no liability regarding, the payment of any of
the revenues owed to the Company by the Operators under the Drilling and
Operating Agreements (the "Revenue(s)"). The Advisor only agrees, and its only
responsibility regarding such Revenue shall be, to facilitate the payment of all
such Revenue to the Company. To that end, the Advisor shall offer to undertake a
review and inspection of all monthly production expenses, operating expenses,
payment statements, etc., from each of the various Operators for completeness
and accuracy. In no event, however, shall the Advisor be responsible for
receiving or distributing any such Revenue to the Company. In such case as any
Revenue is erroneously paid to the Advisor by any Operator, the Advisor shall
forward such Revenue to the Company in an expeditious manner; provided, however,
that the Advisor shall have no liability for any Revenue sent by it to the
Company but not received by the Company; provided the Advisor has sufficient
documentation of its sending such Revenue to the Company.

      Section 12. Oil and Gas Marketing; Transportation.

            (a) To the extent that wells drilled under this Agreement are
drilled and operated under an existing gas sales and marketing contract of an
Operator, then all sales of production of such wells shall be marketed under
that existing arrangement, unless the Company elects to take the oil and gas in
kind, in which case the prevailing charge of such Operator in the market for
transportation and marketing will apply.

            (b) If a well is drilled and there is no existing sales and
marketing contract of the Operator and a new transportation and marketing
arrangement is necessary, the Advisor and the Company may form a new company for
the purposes of transporting and marketing the oil and gas and a fee of up to
ten percent (10%) of the net revenue for providing such services may be charged
to recover the cost of the pipelines involved, gas transportation and
compression charges, desiccants and other charges that may be necessary and
proper in order to transport and market the gas. Advisor will obtain the consent
of the Company prior to entering into any agreements with respect to transport
and marketing of the oil and gas. Any royalties derived from such transport and
marketing agreements shall accrue to the benefit of the Company.


                                       -7-


      Section 13. Piggyback Registration. If at any time or from time to time,
the Company shall decide to register any of its common stock (excluding an IPO)
for sale, either for its own account or the account of a security holder or
holders under the Securities Act of 1933, as amended (the "Securities Act"), the
Advisor shall be entitled to include its shares of Common Stock in such
registration, subject to the right of the Company and its underwriters to reduce
the number of shares proposed to be registered pro rata in view of market
conditions. In the event of any such registration contemplated by this Section
13, the Company agrees that all registration expenses (exclusive of underwriting
discounts and commissions and special counsel fees of a selling shareholder)
shall be borne by the Company. The foregoing registration rights shall be
separately stated in the Registration Rights Agreement

      Section 14. Company Private Placements. To the extent that the Company is
engaged in the solicitation of funds from private investors, partnerships or
other entities under any arrangement in which well interests, tax deductions
and/or Common Stock or other Company Securities, or the Securities of any other
entity or entities, are sold, such solicitations shall be made by private
placement memorandum(a). Such private placement memorandum(a) shall be provided
to the Advisor for review and comment prior to the solicitation and acceptance
of funds by the Company and evidence of the acceptance of the terms and
conditions of such documents by the investor(s) shall be provided to the Advisor
by the Company prior to the transfer of funds under the escrow provisions of
this Agreement. The Company represents that all information contained in the
private placement memorandum(a) will be, to the best knowledge of the Company,
complete and correct in all material respects and to the best knowledge of the
Company, will not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statement therein not
materially misleading in the light of the circumstances under which such
statements are made.

      Section 15. Indemnification.

            (a) Indemnification of the Advisor. The Company agrees to indemnify
and hold harmless, to the extent permitted by applicable law, the Advisor, its
members, managers, officers, directors, representatives, agents and assigns from
and against any and all losses and/or expenses including, but not limited to,
damages, costs, claims, actions, causes of action, demands, judgments, and
liabilities of every kind and description (the "Claims"), caused by, arising
from or in connection with the Advisor's obligations under or involvement in
this engagement, including reimbursement for reasonable attorneys' fees, costs
and expenses. The indemnity agreement contained in this paragraph, however,
shall not extend to any Claims or any rights to reimbursement if and to the
extent that any such Claims or right to reimbursement arises by reason of any
act or omission to act on the Advisor's part that is found in a final judicial
determination (or a settlement tantamount thereto) to constitute bad faith,
willful misconduct or gross negligence on the Advisor's part. The indemnity,
contribution and expense reimbursement agreements and obligation set forth
herein shall be in addition to any other rights, remedies or indemnification
which the Advisor may have or be entitled to at common law or otherwise, and
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Advisor.


                                       -8-


            (b) Indemnification of the Company. The Advisor agrees to indemnify
and hold harmless, to the extent permitted by applicable law, the Company from
and against any and all Claims, caused by, arising from or in connection with
the Company's obligations under or involvement in this engagement, including
reimbursement for reasonable attorneys' fees, costs and expenses. The indemnity
agreement contained in this paragraph, however, shall not extend to any Claims
or any rights to reimbursement if and to the extent that any such Claims or
right to reimbursement arises by reason of any act or omission to act on the
Company's part that is found in a final judicial determination (or a settlement
tantamount thereto) to constitute bad faith, willful misconduct or gross
negligence on the Company's part. The indemnity, contribution and expense
reimbursement agreements and obligation set forth herein shall be in addition to
any other rights, remedies or indemnification which the Company may have or be
entitled to at common law or otherwise, and shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of the
Company.

      Section 16. Performance. The Advisor agrees to use its best efforts to
furnish the Services to the Company on a full time basis.

      Section 17. Information. In connection with the Advisor's activities
hereunder, the Company agrees to cooperate with the Advisor and to furnish upon
the Advisor's request all information reasonably related to the transaction
contemplated by this Agreement.

      Section 18. Non-Liability of Advisor. The Advisor shall perform on behalf
of the Company only the duties that have been specifically delegated to the
Advisor in this Agreement and the Advisor shall have no implied covenants or
obligations to perform any other duties under this Agreement. The Advisor shall
not be responsible for any losses, liabilities, damages, claims or expenses
(collectively, the "Losses") incurred by the Company arising from any acts or
omissions by the Advisor in connection with the performance of its duties under
this Agreement other than Losses resulting or arising from the Advisor's gross
negligence or willful misconduct; provided, however, that the Advisor shall not
have any liability or responsibility for any Loss resulting or arising from an
act or omission by a sub-manager.

      Section 19. Relationship of the Parties. In performing the services
provided for under this Agreement, the Advisor is acting as an independent
contractor, and the Advisor's employees at all times during the term of this
Agreement shall be in the employment of and under the supervision and
responsibility of the Advisor, and no person employed by the Advisor either
directly or indirectly shall be deemed by virtue of this Agreement, or any other
agreement referenced herein, to be the servant, agent or employee of the Company
for any purpose whatsoever.

      Section 20. Mutual Representations and Warranties. Each of the Advisor and
the Company represents and warrants to the other that:

            (a) it is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its organization, (ii) has all power and
authority necessary to own and operate its property, [to lease the property it
operates as lessee] and to conduct the business in which it is currently
engaged, and (iii) is duly qualified as a foreign company and in good standing
under the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification;


                                       -9-


            (b) it has all power and authority necessary to make, deliver and
perform its duties under this Agreement;

            (c) this Agreement has been duly executed and delivered by it;

            (d) this Agreement constitutes a legal, valid and binding obligation
of it, enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law);

            (e) the execution and delivery and performance by the Company and
the Advisor do not and will not:

                        (i) violate its Certificate of Incorporation or
                        Certificate of Organization or bylaws;

                        (ii) breach or result in a default (or an event which,
                        with the giving of notice or the passage of time, or
                        both, would constitute a default) under, require any
                        consent under or give to others any rights of
                        termination, acceleration, suspension, revocation,
                        cancellation or amendment of any material note, bond,
                        mortgage, indenture, lease, license, contract, agreement
                        or other instrument or obligation to which it is a party
                        or by which it or any of their properties or assets may
                        be bound;

                        (iii) breach or otherwise violate any governmental order
                        which names it or is directed to it or any of its
                        assets;

                        (iv) violate any rule, law, or regulation applicable to
                        it or its business or assets; or

                        (v) require any consent, authorization, approval,
                        exemption or other action by, or any filing,
                        registration or qualification with, any Person.

      Section 21. Company Representations and Warranties: The Company represents
and warrants to the Advisor that:

            (a) Capitalization. The authorized capitalization of the Company
consists of (i) 1,000,000,000 shares of the Common Stock, of which 182,123,127
shares are issued and outstanding and (ii) 100,000,000 shares of the Preferred
Stock, none of which are issued and outstanding. All of the issued and
outstanding shares of the Common Stock have been duly authorized and validly
issued in compliance with applicable rules, laws and regulations relating to the
issuance of securities and are fully paid and non-assessable. The options
granted pursuant to Section 4(a) have been, and the shares of Common Stock to be
issued upon exercise of the options granted pursuant to Section 4(a), when
issued in accordance with the terms of the Option Agreement, will be, duly
authorized and validly issued in compliance with applicable United States
federal and state governmental rules relating to the issuance of securities,
fully paid and nonassessable, and the grant of such options is not and the
issuance of all such shares will not be subject to any preemptive rights.


                                      -10-


            (b) Securities Matters and Financial Statements. The Company has
filed with the Securities and Exchange Commission (the "SEC"), and has
heretofore made available to the Advisor true and complete copies of, all forms,
reports, schedules, statements and other documents required to be filed by it
and its subsidiaries, if any, since December 15, 2005 under the Securities
Exchange Act of 1934, as amended (the "Exchange Act") or the Securities Act (as
such documents have been amended since the time of their filing, collectively,
the "Company SEC Documents"), which are all the documents (other than
preliminary material) that the Company, or any present or former subsidiary, if
any, of the Company, was required to file with the SEC since such date. As of
their respective filing dates, the Company SEC Documents complied in all
material respects with the requirements of the Exchange Act or the Securities
Act, as the case may be, and the rules and regulations of the SEC thereunder
applicable to the Company SEC Documents. As of their respective dates or, if
amended, as of the date of the last such amendment, the Company SEC Documents,
including, without limitation, any financial statements or schedules included
therein did not contain any untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading.

            (c) To the best knowledge of the Company, the financial statements
(including the related notes) of the Company included in the Company SEC
Documents (the "Company Financial Statements") comply as to form in all material
respects with all applicable accounting requirements and with the published
rules and regulations of the SEC with respect thereto, present fairly the
financial condition of Company and its consolidated Subsidiaries as at the end
of the periods covered thereby and the results of its consolidated operations
and the changes in its consolidated cash flows for the periods covered thereby,
and were prepared in accordance with generally accepted accounting principles
("GAAP") applied on a consistent basis throughout the periods covered thereby
subject, in the case of the unaudited interim statements, to year-end audit
adjustments and the lack of footnotes and other presentation items. Except as
and to the extent otherwise disclosed in the Company SEC Documents or the
Company Financial Statements, and to the best knowledge of the Company, the
Company has no liabilities of any kind, whether direct or indirect, fixed or
contingent or otherwise, other than (y) liabilities which are not required to be
set forth on the Company Financial Statements in accordance with GAAP, and (z)
liabilities incurred in the ordinary course of business since March 31, 2006.


                                      -11-


            (d) Litigation. There is no pending or, to Company's knowledge,
threatened action against the Company or any of its assets by or before any
court, governmental entity or arbitrator which, if decided adversely to the
Company, would have a material adverse effect on the assets, business, results
of operations, financial condition or prospects of the Company.

      Section 22. Notice. Any notice or other communication required or
permitted to be given under this Agreement shall be deemed given when received
in writing by the Parties at the address below or to such other address or the
attention of such other party as the Parties shall advise the other by written
notice given in conformity herewith:

            If to the Company:        Indigo-Energy, Inc.
                                      13350 Random Hills Road
                                      Suite 800
                                      Fairfax, VA 22030
                                      Tel: (703) 934-6189
                                      Fax:(703) 591-3049
                                      Attention: David Larson

            With a Copy to:           Gersten Savage, LLP
                                      600 Lexington Avenue
                                      New York, New York, 10022
                                      Attention: Arthur S. Marcus, Esq.

            If to the Advisor:        HUB Energy, LLC
                                      255 Airport Road
                                      Indiana, PA 15701
                                      Tel: (724) 349-6690
                                      Attention: Mark A. Thompson

or to such other address or the attention of such other party as the Parties
shall advise the other by notice in conformity herewith.

      Section 23. Section Headings. The section headings used in this Agreement
are inserted for convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.

      Section 24. Multiple Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

      Section 25. Severability. In the event that any one or more of the
provisions contained in this Agreement, or in any other instrument referred to
herein, or the application of any such provision or provisions shall, for any
reason, be held to be invalid, illegal or unenforceable in any respect by a
court of competent jurisdiction, then to the maximum extent permitted by law,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement or any other such instrument.

      Section 26. Waiver. Waiver of any term or condition of this Agreement by
any Party shall be effective if in a writing signed by the Party against whom
such waiver is asserted. Any such waiver shall not be construed as a waiver of
any subsequent breach of failure of the same term or condition, or a waiver of
any other term of this Agreement. No failure or delay by any Party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.


                                      -12-


      Section 27. Assignment. This Agreement and the rights and obligations of
the Parties hereunder shall not be assigned, delegated or otherwise transferred
by the Advisor or the Company without the prior written consent of the other
Party which such consent shall not be unreasonably withheld. This Agreement
shall inure to the benefit of the permitted successors, indorsees, transferees
and assigns of the Company and the Advisor.

      Section 28. No Third Party Beneficiaries. This Agreement is for the sole
benefit of the Parties hereto and their permitted assigns, and nothing herein
expressed or implied shall give or be construed to give to any person or entity,
other than the Parties hereto and assigns, any legal or equitable rights
hereunder.

      Section 29. Confidentiality. The Parties hereto agree not to disclose,
without the prior written consent of the other Party, to any third party the
contents of this Agreement and agree to maintain the confidentiality of this
Agreement for the Term of the Agreement; provided, however, the forgoing shall
not apply to disclosures required by law or a regulatory authority.

      Section 30. Non-Compete and Non-Solicitation. The Company agrees for the
Term of this Agreement that it shall not engage in direct or indirect
negotiations with any oil and gas company or any oil and gas opportunity which
the Advisor has in any way, either directly or indirectly, made known or made
available to the Company. The Company also agrees that it shall not solicit
either directly or indirectly any employees of the Advisor or the employees of
any oil and gas company made known to it by the Advisor for the purposes of
competing in any way with the Advisor.

      Section 31. Governing Law; Venue. This Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of Pennsylvania
without giving effect to its conflict of laws provisions. Venue shall be the
court of Common Pleas, Indiana, PA.

      Section 32. Entire Agreement. This Agreement, including any other
instrument referred to herein contains the entire agreement and understanding
between the Parties hereto with respect to the subject matter hereof and
supersedes all prior agreements, negotiations, correspondence, undertakings,
oral or written, relating to such subject matter.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]


                                      -13-


      IN WITNESS WHEREOF, the Parties have caused this Agreement to be entered
into as of the date first written above.

                                                    INDIGO-ENERGY, INC.


                                                    By: /s/ David Larson
                                                    ----------------------------
                                                    Name:  David Larson
                                                    Title: President


                                                    HUB ENERGY, LLC


                                                    By: /s/ Mark A. Thompson
                                                    ----------------------------
                                                    Name:  Mark A. Thompson
                                                    Title: President



                Signature Page to the Advisory Services Agreement


                                      -14-


                                   Schedule A

                            Well Production Schedule






Exhibit A Form of Option Agreement Incorporated by reference as Exhibit No. 4.2 to Form 8-K filed herewith. Exhibit B Form of Registration Rights Agreement Incorporated by reference as Exhibit No. 4.1 to Form 8-K filed herewith. Exhibit C Form of Drilling and Operating Agreement













































Exhibit D American and Petroleum Institute's Form 610 (to be completed within 30 days after wells come on line)











































Exhibit E Form of Deep Drilling Operating Agreement See Exhibit D